Dollarama starts taking credit cards

MONTREAL — Dollarama is taking the first steps toward accepting credit cards as it prepares to introduce higher priced items next year, with the discount retailer saying it will accept the cards at more than 80 stores in B.C. in early 2016.

“What we’re looking for is to improve the shopping experience of our customers while stimulating more sales to offset the costs,” said chief financial officer Michael Ross.

He said the pilot project will help the company determine customer use of credit cards and whether it has a meaningful impact on sales.

Sales tend to be higher when payment methods other than cash are used, but that also increases the cost to the merchant, who usually must rebate a percentage to the bank or other card issuer.

Dollarama did not say which cards would be accepted at its outlets or specify the length of the pilot project.

The last credit card trial in 2010 ended after 12 months without any action. Payment with debit cards has steadily grown since Dollarama began to accept them in 2008. Nearly 47 per cent of sales were paid with debit cards in the third quarter, up from 43.8 per cent a year ago.

B.C. was selected for the pilot because it was far from its core markets in Central Canada and would be easier to deal with if the pilot project fails, CEO Larry Rossy said.

The move toward credit cards comes as Dollarama announced plans to introduce $3.50 and $4 items across its network of 1,005 stores in the second half of 2016.

The higher-priced items are intended to help the company adjust to the impact of the weakening Canadian dollar. Rossy said the introduction of these items will be slow and won’t affect food products, which will remained capped at $2.

With a reduced share of items priced at $1 or less, Dollarama has started using $1.25 as its new reference price.